Preferreds see another volatile session; NuStar’s spiral down continues; Morgan Stanley gains

By Abigail W. Adams

Portland, Me., Feb. 13 – The preferreds market saw another volatile session on Tuesday with the Wells Fargo Hybrid & Preferred Securities Financial index again seesawing between positive and negative terrain.

Ultimately, the Wells Fargo Hybrid & Preferred Securities Financial index closed Tuesday down alongside the U.S. iShares Preferred Stock ETF down.

NuStar Energy LP’s preferreds continued to lose ground in high volume trading on Tuesday. NuStar’s preferreds have seen steady losses since the company announced a restructuring on Feb. 8.

Morgan Stanley’s depositary shares representing the company’s 6.875% series F fixed-to-floating rate non-cumulative preferred stock made gains in high volume trading on Tuesday.

The seesaw

The Wells Fargo Hybrid & Preferred Securities Financial index continued to seesaw between gains and losses on Tuesday after a volatile day on Monday.

The index was up 0.03% early Tuesday but was unable to hold onto the gain and ended the session down 0.09%.

The U.S. iShares Preferred Stock ETF, however, was down 0.08% early Tuesday but was able to cut its losses as the afternoon progressed. However, the ETF still closed Tuesday down 0.03%.

NuStar’s losses continue

NuStar Energy’s preferreds continued to trade down during Tuesday’s session. The preferreds have been on a steady losing streak since the company announced a restructuring on Feb. 8.

NuStar’s 8.5% series A fixed-to-floating rate cumulative redeemable preferred units were down 47 cents, or 1.91%, to $24.20 early in the session.

The series A regained some strength but still closed Tuesday with losses at $24.30, a decrease of 37 cents, or 1.5%.

NuStar’s 7.625% series B cumulative redeemable preferred stock was down 66 cents, or 2.87%, to $22.36 early in the session.

The series B preferred stock also saw a slight rebound but closed Tuesday down at $22.49, a decrease of 53 cents, or 2.3%.

NuStar’s 9% series C fixed-to-floating rate cumulative redeemable preferred units were down 17 cents, or 0.68%, to $24.74 early in the session. They closed Tuesday at $24.76, a decrease of 16 cents, or 0.64%.

Both NuStar’s series A and series C preferreds closed Friday above their $25 liquidation preference. All three of Nustar’s preferreds saw higher than average trading volume during Tuesday’s session.

NuStar’s preferreds have steadily spiraled downward since Feb. 8 when the owner and operator of pipelines for crude oil and refined products announced plans to merge its general partner NuStar GP Holdings into its operations and reduce the distribution for common units by about $200 million per year.

Morgan Stanley up

Morgan Stanley’s depositary shares representing the company’s 6.875% series F preferred stock were up in active trading on Tuesday. The shares closed Tuesday at $27.67, an increase of 2 cents, or 0.07%.

The depositary shares experienced nearly four times their average trading volume on Tuesday. The shares saw a trading volume of about 238,000 compared to the three-month average trading volume of about 43,000.

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